Paying the Piper

Voters approved a tax to fund the arts. Now the city faces the high price of collecting it.

More than 61 percent of Portland voters checked “yes” on a
Nov. 6 ballot measure to raise millions in new taxes to hire more art
and music teachers and help bankroll arts organizations.

They also bought themselves a new and very expensive city bureaucracy to collect the tax.

Every adult in the
city above federal poverty levels is supposed to pay a flat $35 annual
tax. The city plans to comb through voter rolls, vehicle registrations,
water bills and Internal Revenue Service records to find you and send
you a bill due on April 15, 2013.

The city estimates
the annual overhead will drop to about $550,000 after startup
costs—that’s still well above, as a percentage, the administrative costs
of collecting other taxes. (Multnomah County spends 1.6 cents for every
dollar it collects in property taxes.)

Records reviewed by WW show the city plans to assign four full-time employees to collect the tax.

Eric Fruits, a
Portland economist, says the Revenue Bureau will have problems sending
every citizen a bill and three reminder postcards. “I’ve said all along,
collection issues are going to be a real problem on this tax,” Fruits
says. “How are you going to identify every single adult resident in
Portland?”

As it turns out, the
city didn’t want the job. Records show city officials asked the Oregon
Department of Revenue last June to oversee arts tax collection. The
state said no, saying its staff was stretched too thin.

But the city’s
Revenue Bureau from 2003 through 2010 administered the Multnomah County
Personal Income Tax. Based on that job, the bureau expects 85 percent of
Portlanders to pay the arts tax its first year.

“Most people will self-identify,” Lannom says. “We’re not building anything from scratch.”

"In the low usage areas, we found that our vehicles sit idle four times longer, ultimately affecting overall vehicle availability for the Portland membership base, as well as parking for the Portland community."

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